Substitution of relator permissible in False Claims Act lawsuit

A federal district court in New York has held that in the event of a relator’s death during a False Claims Act lawsuit, the estate of the relator may be substituted as a plaintiff in the litigation. A “relator” is a whistleblower who files suit on the government’s behalf to recover damages from a person or company engaged in fraud against the government. Under the Qui Tam section of the federal False Claims Act, if the lawsuit is successful, the whistleblower receives a share of the government’s recovery.

The court reasoned that a whistleblower’s lawsuit is simply the means by which the government enforces laws against fraud. The whistleblower’s real claim is not against the wrongdoer but against the government for the Qui Tam portion of any recovery under the False Claims Act. Were a whistleblower’s claim to be extinguished upon the whistleblower’s death, explained the court, private persons might be discouraged from pursuing fraud claims on the government’s behalf. Therefore, the death of the whistleblower should not also be the death of his or her claim against the government to share in a settlement or jury award.

The court’s ruling was entered in the case of Colucci v. Beth Israel Medical Ctr, No. 06 Civ. 5033 (S.D. N.Y. March 25, 2009) [Health Care Compliance Reporter ¶800,631].

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